May challenges EU as Brexit talks hit “impasse”, sterling tumbles

LONDON, (Reuters) - British Prime Minister Theresa May said yesterday that Brexit talks with the European Union had hit an impasse, defiantly challenging the bloc to come up with its own plans a day after EU leaders savaged her proposals.

At a summit in Austria on Thursday, EU leaders rejected May’s “Chequers” plan, saying she needed to give ground on trade and customs arrangements for the UK border with Ireland.

The British media said the response had left her proposals in tatters, and May angrily struck back in a televised address from her Downing Street office, saying neither side should expect the impossible from the other.

“Throughout this process, I have treated the EU with nothing but respect,” May said. “The UK expects the same. A good relationship at the end of this process depends on it.”

Sterling extended its losses as May spoke, falling to as low as $1.3053, and was down around 1.5 percent on the day, putting it on course for its biggest one-day drop this year, over growing fears Britain could leave the EU without any deal.

May has said her Chequers proposals for trade with the EU, which would resolve arguments over the border of Northern Ireland with the Irish Republic, were the only way forward. EU leaders in Salzburg repeated their view that the plans would undermine their cherished single market.

After the summit, EU leaders said they would push for an agreement next month, but both sides have warned they are planning for a no-deal scenario.

“It’s not acceptable to simply reject the other side’s proposals without a detailed explanation and counter proposals,” May said. “So we now need to hear from the EU what the real issues are, what their alternative is, so that we can discuss them. Until we do, we cannot make progress.”

In Brussels, European Council President Donald Tusk said after May’s comments he was convinced that the European Union and Britain could still find a compromise.

“While understanding the logic of the negotiations, I remain convinced that a compromise, good for all, is still possible,” he said in a statement. “I say these words as a close friend of the UK and a true admirer of PM May.”